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By Neil Dennis
The euro powered ahead on Thursday, gaining ground on the dollar and other perceived havens, against which the currency had fallen to multi-year lows in recent sessions.
Against the dollar, the single currency climbed 0.6 per cent to $1.2355, overturning earlier losses. The euro’s gains against the yen and the Swedish krona were even more solid, after it fell to a 12-year low against the krona last week and to a similar mark versus the yen a month ago.
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The euro climbed 0.9 per cent to Y97.91 against the yen, and was 0.9 per cent higher versus the krona at SKr8.2773.
Traders said forecasts for economic growth had not materially changed, nor had expected timetables for stimulus policy, but profit-taking moves may have been exacerbated by thin trading conditions.
The euro managed to climb 0.2 per cent to ÂŁ0.7851 against a broadly stronger sterling, which was lifted by retail sales figures.
Retail sales in July were up 0.3 per cent, beating expectations of a drop, as petrol prices increased in the period. A day earlier, labour market data showed that the UK unemployment rate dropped to 8 per cent and thousands more jobs were created than had been expected.
Both sets of data may have been influenced, however, by events such as the Queen’s diamond jubilee and the build-up to the Olympic Games.
Vicky Redwood at Capital Economics said: “Although some of the more fundamental constraints on consumer spending are now lifting, a sustained pick-up in spending still looks unlikely.”
The pound was up 0.4 per cent to $1.5740 against the dollar, and climbed 0.7 per cent to Y124.70 on the yen.
The Japanese currency maintained its weaker tone of the past three weeks, falling to a month low against the dollar and a five-week low versus the pound.
Recent forecast-beating US data have prompted speculation that the likelihood of near-term monetary easing from the Federal Reserve has lessened. This has prompted a sell-off in US Treasury bonds, resulting in higher yields and gains for the dollar.
The yen fell 0.3 per cent to Y79.23 against the dollar.
